U.S. West Texas Intermediate crude oil futures are edging lower on Monday on a record daily rise in global coronavirus cases with big spikes in in infections over the weekend in the United States, while traders await an OPEC technical meeting expected to recommend an easing of supply cuts.
At 12:19 GMT, September WTI crude oil is trading $40.28, down $0.48 or -1.18%.
Prices could remain in a trading range until authorities bring the coronavirus pandemic under control. Demand worries could create uncertainty that will limit gains. Traders are also a little nervous ahead of OPEC’s Joint Ministerial Monitoring Committee meeting on Tuesday and Wednesday. The committee could recommend limiting the amount of current production cuts from 9.7 million bpd for May, June and July to 7.7 million barrels per day (bpd).
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $41.19 will signal a resumption of the uptrend. The main trend changes to down on a move through $37.32.
The minor trend is also up.
The first minor range is $41.19 to $38.77. Its 50% level at $39.98 is potential support.
The second minor range is $37.32 to $41.19. Its 50% level at $39.26 is another potential support level.
The short-term range is $32.18 to $41.74. If the main trend changes to down then its retracement zone will become the primary downside target.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at $40.28, the direction of the September WTI crude oil market on Monday is likely to be determined by trader reaction to the pivot at $39.98.
A sustained move over $39.98 will indicate the presence of buyers. If this creates enough upside momentum then look for a move into the main top at $41.19, followed by the resistance cluster at $41.72 to $41.74.
A sustained move under $39.98 will signal the presence of sellers. This could trigger a break into the next pivot at $39.26, followed by $38.77. The latter is a potential trigger point for an acceleration to the downside with targets coming in at $37.32 and $36.96.
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